Minister Marise Payne says it is entirely appropriate the government should test the market for interest in taking over Medicare, the Pharmaceutical Benefits Scheme and some Veterans Affairs benefits.

Last week the Health Department called for expressions of interest from private players interested in taking over the payment of $29 billion each year in health and pharmaceutical benefits currently managed by the giant Department of Human Services.

Public sector unions immediately warned the move might see up to 20,000 public servants lose their jobs.

The minister has written to The Canberra Times complaining of the paper’s coverage of the move alleging the reports were “exaggerated and careless”.

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Ms Payne is unhappy her office was not contacted for comment, despite the report carrying comments from Health Minister Peter Dutton.

The Human Services Minister said much of DHS’s IT infrastructure was ageing and needed to be replaced and the private sector might be able to supply cheaper solutions.

“This government is committed to reducing red tape and simplifying the system for health care providers and patients,” Ms Payne wrote.

“However, suggestions that these preliminary inquiries are akin to ‘selling off’ the Department of Human Services or that 20,000 jobs may be lost as a result are alarmist exaggerations.”